Mikhail Prokhorov: The Russian Is Coming
Of all the baubles that can be bought by billionaires, none are more intoxicating than a big time sports franchise. It is the ultimate vanity project, and some owners like Jerry Jones of the Dallas Cowboys and George Steinbrenner of the New York Yankees are just as famous as their star players. Their ranks have included oil men, media moguls, garbage haulers, and a former show girl - not to mention a few egomaniacs and eccentrics.
And now the most exclusive club in America is about to get a Russian who owes some of his fame and fortune to a bevy of party girls.
His name is Mikhail Prokhorov and at age 44 he is about to buy the worst team in professional basketball, the New Jersey Nets. It's not often you get a chance to talk to a rich Russian, and we couldn't pass up the opportunity.
Full Segment: Mikhail Prokhorov
Web Extra: Inside a Billionaire's Home
Web Extra: His Childhood Nickname Was Giraffe!
Web Extra: Is He Worth 17 Billion Dollars?
"For me, life and business, in particular is a big game," Prokhorov told "60 Minutes" correspondent Steve Kroft.
If you could afford to do anything, would you do daring stunts on a jet ski and hire a production company to put it to music? Maybe not. But Prokhorov is always looking for a challenge.
Asked if he likes danger, Prokhorov said, "I like to control risk."
By now you have probably guessed that Russia's wealthiest citizen, and largest individual taxpayer is an adrenalin junky; he is also one of the country's most avid sportsmen, a former owner of a Moscow basketball team that won the European championship.
He is also quite tall, 6'8" to be exact. He trains with his personal kickboxing partner, who is also the coach of the Russian national team.
"I am addicted to sport. Without sport, I feel bad. In this case it's some kind of drug," he explained.
Asked how much time he spends daily on his workout, Prokhorov said, "Two hours. Whatever happen, two hours I have my workout."
But when asked if it reduces stress, he told Kroft, "I like to be in stress. ...It's my competitive advantage."
For someone who loves sports, stress and challenges, there is probably no better buy than the New Jersey Nets. For a few hundred million dollars, Prokhorov is just a few formalities away from acquiring 80 percent of the worst team in the National Basketball Association, with a good chance this year of becoming the worst in history.
Twenty years ago, a Russian would never have been allowed to buy an American sports franchise, but NBA Commissioner David Stern says it's just one more sign that the world is changing.
"America is really the only place where the question gets asked, 'What about the foreigners?' This is a global sport; our games are televised in 215 countries and in 43 languages. So it was really a natural import of globalization," Stern explained.
It also has something to do with the recession: a number of NBA teams are struggling financially, and Prokhorov has the one thing the league and the Nets need most right now: very deep pockets which come from a far-flung financial empire.
Prokhorov flew us to Siberia to check out Russia's richest gold mining company. He owns almost half of it, plus a big chunk of the world's biggest aluminum producer. There is a media empire, plus two banks, an insurance company, and lots of real estate, including his house which has a built-in swimming pool and of course a fitness center.
He showed us a model of his 200-foot yacht. The real one, he says, makes him seasick.
Asked where the actual boat is right now, Prokhorov admitted, "Really, I don't know."
And we spotted some of his other toys in his home, like a brand new Kalashnikov rifle, designed for the special forces.
It never hurts to have friends in the special forces, and right now Prokhorov has friends everywhere. The night "60 Minutes" and Kroft were invited for dinner, the guest list included a former Russian governor and one of the country's biggest movie stars at a table laden with regional delicacies flown in for the occasion and endless bottles of Chateau Lafite Rothschild '95.
After business and sports, Prokhorov says food is his favorite passion, followed by human interaction, and beautiful women - and on that last front, he has managed to remain unencumbered
"And frankly speaking, I like women. In my heart I am still teenager. And I am very open and I don't want to hide this," Prokhorov told Kroft, laughing.
"You're a big risk taker, in business and in and in sports, but not with women. Right?" Kroft asked.
"I'm not to blame," he replied. "I think women, they're making the same mistake with me all the time. The way to the man's heart is through his stomach."
He says he hasn't found a woman who can cook well enough to marry, but he seems to be looking for her in all the wrong places. When Prokhorov took "60 Minutes" to Moscow's exclusive "SoHo" club, there were 20 beautiful women waiting in his private section to entertain him and his friends, and none of them looked like they wanted to spend their lives over a hot stove.
As we said earlier, this penchant for pulchritude has gotten him in to trouble before and helped him make a fortune.
But before we get to that, it helps to know about his money and how he made it.
"People say you are the richest man in Russia," Kroft remarked.
"Maybe, who knows?" Prokhorov replied.
Asked whether he knows how much money he has, he told Kroft, "No."
"Does 17 billion sound about right?" Kroft asked.
"I'm lucky to have enough money to be really independent. But it doesn't drive me just to count money, thinking about money, It's only a side effect of what I'm doing in business," Prokhorov replied.
Like most Russian billionaires, Prokhorov's fortune was molded from the ashes of the former Soviet Union, with a little bit of luck and the help of a powerful political connection.
He was raised among the Soviet elite and studied at the prestigious Moscow International Financial Institute where he majored in international finance.
So when communism and the Soviet Union finally collapsed, he was one of the few people who knew anything about world markets and free enterprise.
"We made a crazy transformation, just crazy. I can't imagine 20 years ago, we know nothing about capitalism, nothing," he remembered.
His expertise drew the attention of Vladimir Potanin, a future deputy prime minister of Russia with close ties to the Kremlin who had just been given the right to open two private banks.
He asked Prokhorov to run them as his partner; the downside was the job might get him killed. During the 1990s, hundreds of Russian businessmen were gunned down by contract killers hired to resolve disputes or by gangsters trying to muscle in on someone else's turf.
"It was Wild West. It was a territory with no sheriff," Prokhorov recalled. "No rules, you need to survive."
And he did survive and with no blood on his hands: by the time he reached 30, he was already a multimillionaire, but a much bigger payday was just around the corner.
In 1995, Prokhorov and Potanin's bank won the equivalent of the Russian lottery: Kremlin leaders gave them what amounted to an insider's opportunity to buy one of the state's most valuable assets - a huge mining and metal operation called Norilsk Nickel, which is among the world's largest producers of nickel, copper and platinum.
They acquired it from the Kremlin in a so-called auction for the measly sum of a few hundred million dollars, in a process that even Prokhorov's business partner admitted wasn't perfect and probably not even legal under western standards. But it was legal in Russia.
Yulia Latynina, one of Russia's top business journalists, says it was sort of like a slam dunk. No one was shocked or surprised. "Everybody would have would have been surprised if they didn't win it," she explained.
Asked if the process was rigged, Latynina said, "Yes, it was rigged. But it cannot be explained in normal economic terms to an outsider, especially an American."
But she says this is the way these things worked. "You had robber barons, we had oligarchs," she told Kroft.
Prokhorov transformed the decrepit mining company into one of the most productive operations in the world, taking it public before world prices for metals and other raw materials began to skyrocket along with the price of his stock and he sold at the perfect time but not necessarily because he wanted to.
And now we get to the party girls. In January 2007, Prokhorov flew a planeload of friends to the French ski resort of Courchevel, and brought along eight Russian models to help entertain them, not an unusual custom in the upper echelons of the Russian business world, but apparently unknown to French constables who took Prokhorov into custody on the suspicion of promoting prostitution.
According to Prokhorov, the French thought he was bringing prostitutes into the country. "It was absolutely police misunderstanding," he said.
He was there for three days and couldn't leave. "It sounds strange, but it was real fun for me. It's a good experience. I like even such challenges," he told Kroft.
It created a minor international incident with French President Nicolas Sarkozy giving Prokhorov a shout out as a "man who obviously wants to please his friends."
Prokhorov thought it was a "good joke."
And he responded in kind.
"You said, 'The French elite is envious because they're lagging behind in fashion, in life and in sex drive,'" Kroft said, quoting the billionaire.
"That's true," Prokhorov replied, laughing.
"The Russian government was not too happy about this, right, about the publicity?" Kroft asked.
"It's natural," Prokhorov replied.
French police never pressed charges and, according to Prokhorov, later apologized. But Russian cartoonists had a field day; a fruit juice company lampooned him in a commercial, and his well-connected business partner Vladimir Potanin suggested it would be a good time for Prokhorov to sell his share of their joint ventures, which he did, for $10 billion.
He sold his share just two months before the international financial crisis destroyed the Russian stock market.
Prokhorov, who was sitting on a mountain of cash, became the richest man in the country and it might not have happened without those party girls.
"It's a part of any business, to be lucky," he said.
"And you sold at just the right time?" Kroft asked.
"Miracle happens!" he replied.
It's safe to say that there aren't NBA owners with stories like that one, and Prokhorov's life in the opaque world of Russian business presented a unique challenge for the National Basketball Association, which is charged with investigating the personal and business background of prospective NBA owners.
But Commissioner David Stern said Prokhorov passed all the tests.
Asked if he thinks Prokhorov is a man of character, Stern told Kroft, "I think he's a man who has passed a very tight security check and nobody has come up with any reason why he shouldn't be an NBA owner."
Stern believes Prokhorov to be a shrewd businessman, although we found him to be a bit unorthodox.
For one, he doesn't use a computer. "We have too much information and it's really impossible to filter it," he told Kroft.
He believes his biggest strengths are organization and leading people.
"Any abilities you wish you had that you don't have?" Kroft asked.
"Sometimes maybe to be less tall," he joked.
"To be less tall?" Kroft asked. "Well, you're about to enter a world of very tall people with the NBA. You're gonna actually be pretty short."
"Compared with the players, yes. But compared with the common people, I am tall enough, trust me," he replied.
The deal to buy the Nets is expected to be concluded in the next few months. In the meantime, Prokhorov has been brushing up on his English and his jump shot.
If everything goes according to plan, two years from now he will move the nets to a brand-new arena in Brooklyn, home to the largest Russian-American community in the U.S., and who knows, he may even find that perfect woman he has been looking for.
"And I'm real excited to take the worst team of the league and turn it to be the best," he told Kroft.
Asked if he thinks he can do that, Prokhorov said, "I'm confident. Do you remember in the Frank Sinatra song, New York, New York, "If I can make it there I can make it anywhere."
Produced by Robert Anderson